Kay Company budgets overhead cost of $4,200,000 for the next year. The company uses direct labor hours as its overhead allocation base. If 96,000 direct labor hours are planned for the next year, what is the company's plantwide overhead rate?

Multiple Choice

• $0.21 per direct labor hour.

• $43.75 per direct labor hour.

• $34.37 per direct labor hour.

• $9.38 per direct labor hour.

• $0.11 per direct labor hour.

Which of the following statements is true with regard to the departmental overhead rate method?

Multiple Choice

• It is especially accurate in assigning overhead costs that are not driven by production volume.

• It uses a different overhead rate for each department.

• Each department has the same rate for the same activity pool.

• It requires one overhead cost pool and one rate.

• It is the same as activity-based costing.

Peterson Company budgets overhead cost of $5,900,000 for the next year. The company uses machine hours as its overhead allocation base. If 100,000 machine hours are planned for the next year, what is the company's plantwide overhead rate? (Round your answer to two decimal places.)

Multiple Choice

• $0.02 per machine hour.

• $59.00 per machine hour.

• $48.66 per machine hour.

• $10.00 per machine hour.

• $0.10 per machine hour.

Kay Company budgets overhead cost of $4,074,000 for the next year. The company uses direct labor hours as its overhead allocation base. If 97,000 direct labor hours are planned for the next year, how much overhead would be assigned to a product requiring 3 direct labor hours?

Multiple Choice

• $42.00

• $32.00

• $126.00

  Henry Company allocates overhead cost using a single plantwide rate of $80 per direct labor hour. Each product unit uses three direct labor hours and 2 machine hours. The overhead cost per unit is:

  Multiple Choice

• $80.

• $160.

• $240.

• $320.

• $400.

Which of the following statements is true with regard to the plantwide overhead rate method?

Multiple Choice

• The rate is determined using volume-related measures.

• It is logical to use this method when overhead costs are not closely tied to volume-related measures.

• This method uses multiple overhead rates.

• The basic principle underlying the plantwide overhead rate method is that activities are what cause overhead cost to be incurred.

• This method uses a different overhead rate for each department.

• $96.00

• None of the choices